New UK Industrial Strategy targets automotive sector for global competitiveness

Government outlines long-term plan to boost automotive, addressing energy, skills, and trade amidst challenging production figures

New UK Industrial Strategy targets automotive sector for global competitiveness

The UK government has published a new Industrial Strategy with a strong focus on the automotive sector, fulfilling a long-standing request from the industry. This long-term, cross-government framework, coupled with a new trade strategy, aims to help the UK automotive sector regain global competitiveness.

The strategy addresses key challenges such as energy costs, infrastructure, skills shortages, and access to finance. Specific sections like “Drive35” highlight government measures to support the industry, underscoring its importance to growth plans.

These announcements coincide with the SMMT’s 17th International Automotive Summit, where the Rt Hon Jonathan Reynolds MP, Secretary of State for Business and Trade, reaffirmed the sector’s vital role. While acknowledging the positive policy framework, the SMMT emphasised that effective and swift implementation is crucial for attracting automotive investment, especially given intense global competition and geopolitical uncertainties.

The urgency of this strategy is underscored by the latest vehicle production figures, which show a fifth consecutive month of decline in May. This downturn is attributed to model changeovers, restructuring, and uncertainty surrounding US tariffs, which saw shipments across the Atlantic drop by over half in May. The timely signing of the UK-US trade deal, set to take effect next Monday, is therefore critical, particularly for the UK’s high-value, small-volume manufacturers.

For exports to remain competitive, the strategy also needs to address domestic issues like the UK’s high energy costs, alongside reskilling efforts and improved access to finance for SMEs. These measures will enable investment in technologies, products, and talent to enhance the UK’s competitive edge. A new SMMT report, “The Competitive Edge: Driving Long-Term UK Automotive Growth,” suggests the potential for an additional £50 billion economic boost and a return to the top 15 global auto manufacturing locations by providing the UK’s net-zero ambitions.

The SMMT extended thanks to all speakers and attendees at the recent Summit, as well as sponsors AutoTrader, DHL, NTT Data, Pinsent Masons, and Shoosmiths. The next major event on the calendar is the 108th SMMT Annual Dinner on Tuesday 25 November in London, with early bird tickets available. Click here for more information.

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